Yen and Yuan Watch: USD/JPY and USD/CNY Daily — 2026-10-26

Top developments

Yuan Climbs to Four-Year High Ahead of Policy Meetings

On Monday, October 26, China’s yuan climbed to a fresh four-year high against the dollar, extending its longest winning streak since May. This appreciation was driven by softer oil prices and declining US Treasury yields. The PBOC set the central USD/CNY reference rate for the upcoming trading session at 6.7162, a slight narrowing from the previous day’s fixing of 6.7180, though it remained weaker than the Reuters estimate of 6.6691. Despite the market rally, the PBOC maintained a cautious stance, keeping a "lid" on the currency by setting a midpoint that was still weaker than market expectations.

1 sources

investinglive.com

PBOC is expected to set the USD/CNY reference rate at 6.6691 – Reuters estimate

Yen Outpaces Peers Amid Global Risk Aversion

The Japanese yen surged against its major counterparts on Thursday, October 22, as a selloff in global equities fueled risk aversion and boosted demand for safe-haven assets. This move occurred just as markets entered a pivotal central bank week, with currency markets remaining subdued ahead of meetings by the Fed, BoJ, and ECB. The yen's strength has also led investors to look elsewhere for carry-trade funding, with currencies like the Canadian dollar and the yuan being eyed as potential replacements for the yen in carry-trade strategies.

Japan’s Export Data Misses Expectations

Japan’s exports posted a significant miss in September as growth slowed to 16.7%, while imports grew 18.9%, also falling short of Reuters' expectations of 19.6%. This data highlights the pressure on Japan’s trade balance, which is a key factor in the ongoing debate about the sustainability of the yen's strength and the potential for further Ministry of Finance intervention.

Local view

In China, local media reported that the CFETS RMB Index fell to 103.41 in the week ending October 23, down 0.29 from the previous week, indicating a slight pullback in the basket of currencies despite the bilateral strength against the dollar. The Shanghai Securities Journal noted that the PBOC raised the yuan's central parity rate against the dollar by 18 basis points to 6.7162 on October 26. In Japan, while specific local commentary from the past week is limited in the provided sources, the broader context of the "super central bank week" and risk-averse pivots are dominating global financial news coverage.

Context & numbers

• USD/CNY Fixing (Oct 26): 6.7162 (Previous: 6.7180).
• CFETS RMB Index (Week ending Oct 23): 103.41, down 0.29 week-on-week.
• Yen Performance: The yen appreciated approximately 6% against the dollar since late July, when authorities intervened.
• Japan Exports (Sept): Growth slowed to 16.7%.
• Japan Imports (Sept): Growth at 18.9%, missing the 19.6% expectation.

On the radar

• Pivotal Central Bank Week: Markets are bracing for meetings from the Fed, Bank of Japan, and European Central Bank, which are expected to be pivotal for currency direction.
• Carry Trade Shifts: Investors are increasingly looking at the Canadian dollar and Chinese yuan as alternatives to the yen for carry-trade funding due to the yen's recent appreciation.
• PBOC Stance: Analysts are watching closely to see if the PBOC will continue to resist a rapid appreciation of the yuan or allow it to strengthen further, given the current four-year highs.